Another complaint about Capital One bafflegab

Maybe Capital One should take a course in remedial English. The credit card issuer seems to be having a tough time communicating relatively simple ideas.

Betty Rome, for example, would be thousands of dollars wealthier now had Cap One expressed itself clearly. Instead, she says, the company spent months trying to trick her into opening an account she didn't want.


Yet that corporate misdirection pales in comparison to the Cap One contract update I wrote about Tuesday.

The company recently informed its millions of cardholders that "we may contact you in any manner we choose," including a "personal visit" to your home or workplace.

As if that wasn't spooky enough, Cap One's contract also said the company has the right to "modify or suppress caller ID and similar services and identify ourselves on these services in any manner we choose."

The story was picked up by news outlets across the country and prompted plenty of chirping on Twitter and other online venues.

Pam Girardo, a Cap One spokeswoman, told others what she first told me: The company has no intention of actually dropping by people's homes or offices, and it won't really mess with your caller ID.

But she has yet to provide an adequate answer about why Cap One asserted such over-the-top rights in the first place, or why customers should believe the non-binding word of a spokeswoman rather than the legally enforceable language now written into contracts.

Girardo has said only that Cap One is reviewing the contract language.

Hopefully the company will take a tip from the Greek playwright Euripides, who said that "the language of truth is simple." But Betty Rome's experience suggests this may be wishful thinking.

Her aunt died in 2010. Rome, 73, of Culver City, inherited an individual retirement account at Cap One worth about $8,600. She contacted Cap One to request the funds.

"They said I had to open an account with them to get the proceeds," she told me.

This was weird. Rome, a retired lawyer, had never heard of such a requirement.

"They said they were just following IRS rules," she said.

Certainly the Internal Revenue Service needs to be made aware of such a transaction. When IRA funds pass from a deceased owner to a beneficiary, that's what's known as a taxable event. The money needs to be attached for Uncle Sam's purposes to a new name and Social Security number.

But did the IRS actually require Rome to become a Cap One customer before she could receive her aunt's inheritance?


Rome said she went back and forth with Cap One for months about the need to open an account, and got nowhere.

Finally, in 2011, she received a letter from Jose Castanon, who identified himself as Cap One's manager of corporate complaints.

"Please understand," he wrote, "that we are required to follow IRS guidelines when processing IRA distributions."

Castanon referred Rome to the tax agency's Publication 590, which outlines procedures for transferring IRA funds from one person to another.

There is nothing in Publication 590 that requires a beneficiary to open a new IRA account with a financial institution.

Anabel Marquez, an IRS spokeswoman, declined to comment on Cap One's practices. She said the tax agency won't "engage in speculation" about a financial institution's dealings with consumers.

The fact is, someone in Rome's position has two choices. She can open a new account and move the money there. Or she can opt to receive the IRA funds in a lump sum, pay any taxes or penalties, and go on her merry way.

The discount brokerage Charles Schwab does a very good job explaining this in plain English in an online brochure entitled "You've just inherited a retirement account. Now what?"

A spokeswoman for Schwab's IRA department explained to me that if a non-customer chose to receive inherited IRA funds in a lump sum, the company automatically would create what's called a temporary tax reporting account.

The money would be moved into the account so the IRS could wet its beak. Then it would be moved out of the temporary account, a check would be written, and the temporary account would be closed.

"That all happens behind the scenes," the spokeswoman said. "You'd never know that we did all that before you received your check."

Nothing like this was ever offered to Rome.

In his 2011 letter, Cap One's Castanon said that "whenever the funds are paid to you, we must open a beneficiary IRA account in your name and Social Security number to facilitate tax reporting to the IRS."

A reasonable inference from this statement is that a new IRA account must be opened by the new beneficiary and that this is a requirement laid down by the tax agency.

Cap One's Girardo challenged this interpretation. She said a "beneficiary IRA account" is the same as what Schwab referred to as a "temporary tax reporting account."

And that may be true, except one is named in a clear and straightforward manner and the other is not.

One is also a back-office clerical procedure unseen by the consumer, and the other is presented as a step the consumer must take on her own.

Girardo said Cap One was always eager to make the IRA funds available to Rome. The problem, she said, is that Rome refused to provide her Social Security number.

Rome doesn't remember things like that. To prove her point, she shared with me notices she received from the credit reporting company TransUnion showing that Cap One accessed her credit file twice in 2010 and once in 2011.

That would not have been possible unless Cap One had Rome's Social Security number.

Girardo didn't dispute that Cap One had requested and received information from Rome's credit file. But she said Rome nevertheless failed to verify that Cap One had the correct Social Security number, even though the company's repeated accessing of her credit information showed that it did.

"We remain hopeful that Ms. Rome will be willing to fulfill on this request," Girardo said.

Rome told me she saw no reason to complete any document that could allow Cap One to open an account in her name. "They already have all the information they need," she said.

A frustrated Rome walked away from this mess several years ago. The only reason it's come up again is because the federal Office of the Comptroller of the Currency, which regulates big banks, finally got around last month to responding to a complaint Rome filed in 2011.

Why it took regulators three years to stir from their slumber will have to be a topic for another day.

All I know is this: If Cap One wants Rome to verify that the company has been using the correct Social Security number since 2010, which it obviously has, then she'd better do so. These guys play rough.

At the same time, a pattern is emerging. Cap One seems unable to communicate in a simple and forthright manner.


Rome was left with the impression that she'd have to forgo an inheritance of more than $8,000 because Cap One set unacceptable conditions for getting the money.

Meanwhile, millions of Cap One cardholders may be thinking that Cap One has claimed a legal right to stalk them.

All of this was avoidable.

Cap One has made deliberate decisions that seem intended to overreach and intimidate, confirming in the eyes of many the company's thoughtlessness and occasional ruthlessness.

And if anyone from Cap One comes to my home or workplace, I'll be happy to say as much in person.

David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to